Gabelli Puts Rogers at 2.4% of Dividend Fund Portfolio

Gabelli’s Global Rising Income and Dividend Fund reported Rogers Communications as 2.4% of its portfolio at June 30. Its second-quarter letter highlighted the Canadian company’s wireless, cable, sports and media businesses.

The holding appeared in a tough quarter for the fund: it returned 5.78%, compared with a 13.90% gain for the MSCI World Index. Gabelli’s Rogers case centers on its broad Canadian reach and the value of its sports properties.

Rogers agreed in July to buy Kilmer Sports’ remaining 25% stake in Maple Leaf Sports & Entertainment for C$4.35 billion. The deal, subject to league approvals, would give Rogers full ownership of MLSE, which includes the Maple Leafs, Raptors and Toronto FC.

Gabelli’s letter points to a possible next step: combining Rogers’ sports and media assets, then selling a minority interest to institutional investors. Rogers has also said it plans to offer investors a stake in its consolidated sports and media holdings after the MLSE purchase closes.

That plan could bring in capital and help investors see a separate value for the sports assets. But it depends on completing the MLSE deal and finding buyers willing to invest at an attractive price.

Rogers’ latest results offer some support for the investment case. In the second quarter, service revenue rose 8% to C$5.1 billion, while adjusted EBITDA, a measure of operating profit, increased 3% to C$2.4 billion.

Free cash flow reached C$982 million, and Rogers reported a debt leverage ratio of 3.8 times. That debt load makes the cost and funding of the MLSE purchase important, even as the company pursues a future sale of minority interests.

Investors will watch for league approvals, the expected fourth-quarter closing, and details on the planned minority sale. Those steps will show whether Rogers can turn its sports holdings into new investor capital without losing control.